A Debate Over Excess Savings, How Much Stimulus Still Hasn’t Been Spent?
•
•
23 comments on A Debate Over Excess Savings, How Much Stimulus Still Hasn’t Been Spent?
•
Subscribe to MishTalk Email Alerts.
Subscribers get an email alert of each post as they happen. Read the ones you like and you can unsubscribe at any time.
This post originated on MishTalk.Com
Thanks for Tuning In!
Mish
Subscribe
23 Comments
Newest
1 year ago
Also question a long run savings rate of 7% and even if accurate, how much of that is due to a very small subset of the population. I suppose it is impossible to quantify a median savings rate but my guess would be for 95% of the population the rate is around 2%.
1 year ago
For 95% of the population, I think the best guess would be negative savings, especially if you eliminated housing value.
1 year ago
This may be the first recession that started from the supply side (inability to produce) rather than demand side (the desire to spend less).
1 year ago
I think it is both. Most people that retired or stopped working consume less. Inflation has eaten into it as well. This recession was overdue before covid. Don’t people remember the Fed QT tantrum the market threw in 2018? The Fed needs to reestablish baseline equilibrium by removing all QE and letting rates normalize. Only productivity should survive in the end. Most of the economy is still unproductive and doesn’t contribute to overall productivity.
1 year ago
If you print a load of money and shove it into poor people’s sweaty, outstretched hands, isn’t this really a big net zero? Won’t money simply be devalued by the amount you print, aka inflation?
1 year ago
Yes. Same effect if you hand the money to an ever growing and essentially useless bureaucracy.
1 year ago
The middle class (is there a middle class?)will be eating pancakes mourning, noon, and night similar to the last great depression.
1 year ago
Place a comma after pancakes and your sentence works in both senses of mourning/morning!
1 year ago
Replace pancakes with Ramen noodles. Pancakes have wheat in them which is quite expensive.
1 year ago
The poor, as a percentage of the population, is increasing rapidly due to inflation and asset bubbles. Credit Card usage will increase tremendously going forward.
This Post WWII Monetarist experiment is not going to end well. Unless the poor like cake.
1 year ago
Bracket the “excess savings” with the “planet has too many people” argument. Common feature among the declaimers is a lack of common sense and/or they are just evil power grabbers.
1 year ago
My take on so called excess savings theory: the perpetrator of the financial crisis needed to explain away their failure for the dumb enough who still buy their bs.
1 year ago
Someone always gets the money. But the thesis is the poor have it and will spend it.
What if the poor already spent it and the wealthy no longer feel so wealthy due to asset price declines?
Q: What is “saving” anyway?
A: Production Minus Consumption
We handed out free money with nothing being produced then we wonder why we have inflation!
1 year ago
“Someone always gets the money.” Hmm. What is money? Do we not simply have layers of fiat currency that are printed from thin air and thus can go back into thin air? The dollar is the senior fiat currency, created by a soverign. Stocks are fiat currencies created by corporations. Bitcoin is fiat currency created by the people. All from thin air.
In a recent example you mentioned $1000 and LUNA being $2000 in the economy until LUNA went under and that fiat currency was evaporated back into the ether from whence it came. How are corporate stocks or the dollar any different. All are IOUs/debt. Isn’t this just a long discussion which used to be answered by Exter’s pyramid?
1 year ago
2008+: free money given to banks and financials – no inflation.
2020+: free money given to “civilians” – inflation within 18 months.
The FRB claimed they wanted to increase inflation to 2%, but couldn’t get the inflation they “wanted.”
The Fed always knew how to create inflation; they simply didn’t want to give money to “civilians.”
1 year ago
“Consumers are in such great financial shape”
…
Absolutely.
The only explanation for this chart is that it is upside down.
link to sca.isr.umich.edu
1 year ago
Is that worse than 2012? Don’t show it to papa Jerome.
1 year ago
Did crypto denominated holdings count in those savings figures? If not, I don’t see that they’d have any effect. Somebody ended up with the real dollars, even if it all goes to zero.
1 year ago
The same could be said for any purchase that is not consumed. Stocks, gold, bonds, land etc. Someone else always gets the money, so it is a shift in ownership of money and assets, not a spending/removal of money
1 year ago
So a decrease in savings would essentially represent money going from people to corporations, or are corporate savings counted too?
1 year ago
But aren’t corporations people too?
1 year ago
Yep… and money is speech.
1 year ago
Only when they vote in elections.